Back in October 2014, an attempt by the UK before the European Court of Justice to challenge the EU’s cap on banker’s bonuses was big news. Then, one of the court’s principal advisors – Advocate General Jääskinen – declared, quite erroneously, that the EU did posses the powers to apply the cap. Weakly, the UK government threw in the towel and the way was open for what was little more than a political attack on the city of London and a growing impression by many in the business community that the UK government was under the heavy thumb of Europe.
But the real blow to banker’s bonuses was not in the end wielded by the EU, but by UK voters in the Brexit poll. This led to the departure of some bankers to the continent and a depressed demand for banking services. In a Britain faced with economic marginalization there will undoubtedly be less in the coffers for bonuses early next year. A further blow will also come from the UK Prime Minister’s insistence that she will not put a special case for the city of London when it comes to negotiating the teems of a Brexit deal.
The UK relies entirely upon the city of London to maintain a positive balance of payments and without it would not be able to continue working as a viable economy. We should not all be misled by the fact that UK stocks have risen to a sixteen month high, as this is largely on the back of a weak domestic currency. Very soon the true message of Brexit will hit the markets and the party will be over. What Brexit and the failed Columbian referendum both show only too clearly is that when popular democracy is given a voice it generally results in an outcome that hurts the interests of the voters themselves. A similar popular vote about bankers’ bonuses would have let jealousy prevail and then bankers certainly would have left in droves.
It would have all been so different if Britain had stood up to the EU back in 2014 and listened to FedEE. BBC Radio 4 Interview about bankers’ bonuses with Robin Chater, FedEE Secretary-General, October 20th 2014. (7 minutes).